Govt PLI Scheme - Manufacturing Sector - Acuité Ratings & Research

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research

"Acuité believes that the government decision to provide Production Linked Incentive (PLI) amounting to Rs 2 Lakh Cr across 10 manufacturing sectors for the next 5 years can have a significantly positive impact on fresh private sector investments in India. This is also consistent with the principle of 'Atmanirbhar Bharat' as a large proportion of the products in the specified sectors are currently imported particularly from China. While the details of the PLI and the eligibility criteria are awaited, it should incentivise the corporate sector to set up greenfield units in the emerging sectors such as advanced battery cells, solar PV modules and electronic components apart from the traditional sectors like auto, pharma, special steels and capital goods where there are gaps in the domestic supply chains, necessitating imports. The PLI scheme has also covered the textile sector which has significant higher employment generation potential. In our opinion, the PLI scheme has the potential to attract FDI and strengthen the manufacturing sector in India. If the PLI schemes are devised well, this has the potential to crystallise aggregate capital investments of up to Rs 10 Lakh Cr over the next 3 years in India including FDI."

Source : Equity Bulls

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